A business has two job openings. The “good” job offers pay and benefits equal to 20 utility points. The “bad” job offers pay and benefits equal to 10 utility points.
A motivated worker can go through a training program with x utility points. An unmotivated worker can go through the same training program with y utility points.
The business would like to hire motivated workers into the “good” job and unmotivated workers into the “bad” job. Determine the ranges of x and y required by their training program to provide adequate separating equilibrium in this scenario. What values of x and y would provide a pooled equilibrium?